2010 was not a very good year for the general public in the United States. Unemployment rates continued to tip at 10 percent, jobs were disappearing at an alarming rate, and houses were foreclosed in unprecedented numbers. For the average guy and gal in the United States, it was recession business as usual. Too busy worrying about how to find the funds to repair the car, pay for increased insurance premiums, replace the twenty-year old leaking roof, replenish the retirement fund that was chewed up in the financial disaster last year or help the kid with college tuition? You are not alone, and in fact you fit right in with the general citizenship in the United States. In another place and time – the 2010 corporate world – there was a different reality.
Business was robust in the national and international arenas. Mergers and acquisitions (M&A;) in 2010 had far-reaching, international consequences. Too busy figuring out how to make financial ends meet to notice the global trends? You might be surprised who merged with whom. Here is a brief list of some of the companies that traded up and down, for fun and profit.
Sample of Corporate Musical Chairs
Yahoo! acquired Associated Content; Southwest Airlines acquired AirTran; Continental Airlines acquired United Airlines; Nestle acquired (majority shares of) Dogan & Balaban; IBM acquired Netezza (a data warehousing company) plus thirteen other companies; Disney acquired Playdom; Filmyard acquired Miramax (From Disney); News Corp acquired Skiff (e-readers) and Journalism Online; CBS acquired Eco Media. And don’t forget the nearly 160 banks that failed and were brokered to other banks in 2010 by the Federal Deposit Insurance Corporation (FDIC).
Those mergers are just a very small sampling of the action that was going on during the year. To keep up with the daily dose of mergers and acquisitions, bookmark Yahoo! finance page, M & A.
Global Mergers and Acquisitions Top $2.3 Trillion in 2010
According to Mergers and Acquisitions Website, global M & A was up by 19% in the last year, is spite of the economic problems in Europe. Interestingly, they list Goldman Sachs (yes, that Goldman Sachs of Wall Street) as the top M & A adviser in 2010, based on information published by Thomson Reuters.
The Mergers and Acquisitions report, submitted December 20, 2010, reported, “Global M&A; to date totals $2.3 trillion, up from $1.9 trillion. The U.S. accounted for 34% of the world’s corporate marriages. Within the U.S., mergers and acquisitions raised 11% to $773 billion in 2010….The energy and power sector was the most active segment in 2010. Announced M&A; targeting energy and power reached $482 billion, up 38% from 2009….Much of this sector’s activity was concentrated in the U.S., where 47%, or $226.2 billion worth of transactions were completed. Meanwhile, emerging market M&A; totaled $378.5 billion – 17% of all M&A.; That is the largest percentage on record.”
2011: A Better Year?
Will 2011 bring economic improvement? Well, some financial advisers say yes, some say no. Depends where they stand.. For the common citizen, financial security still means being able to pay the monthly bills and have a little left over to save for a rainy day and retirement. For corporations, it means having the capital, financial savvy and positioning to invest millions or billions of dollars to merge and acquire more businesses. I suppose it’s just a matter of perspective, and how far over you place the decimal point in the accounting ledger.
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